UWM bolsters business via debt offering, products

United Wholesale Mortgage has recently taken steps to bolster its financial position.

The mega lender announced plans to raise capital through a debt offering and introduced two new products aimed at boosting originations through its broker channel.

On Friday, UWM revealed it would raise $800 million through a private offering of senior notes. The company had initially planned to raise $500 million but increased the offering after strong demand from investors. The senior notes carry a 6.625% interest rate and will mature in 2030.

Proceeds from the offering will be used to reduce outstanding amounts on UWM’s 

Despite the traditionally slow end-of-year origination activity, the wholesale lender is being aggressive with new program rollouts to give its brokers a competitive edge in securing business.

In early December the Pontiac, Michigan-based lender launched a 60-basis-point incentive program designed to give its brokers a competitive edge. 

The program applies a 60-basis-point pricing advantage to conventional and government loans for borrowers with FICO scores of 720 or higher. It is designed to help brokers be competitive in today’s market, UWM said in a press release.

UWM also eliminated Loan-Level Pricing Adjustments (LLPAs) on government loans with the Federal Housing Administration, Department of Veteran Affairs and the Department of Agriculture that have FICO scores of 600 and above.

This change, which will remain in effect through March 31, 2025, is expected to improve pricing by up to 150 basis points for borrowers typically affected by the highest LLPAs, providing brokers with a pricing advantage, UWM claims.

The wholesale lender originated $39.5 billion worth of loans in the third quarter, including $26.2 billion of purchase mortgages and $13.3 billion of refinance.

For the fourth quarter, UWM is guiding to even higher volume, with the upper end at $41 billion; the lower end is $34 billion. For gain margin it expects between 85 basis points to 110 basis points.

Even with the higher rates and the normal purchase market slowdown in the fourth quarter, Mat Ishbia, the company’s CEO, feels comfortable with the production guidance range. Look for a “dominant 2025” for UWM “on purchases, and hopefully, on refis as well,” he said during the company’s third earnings call.